Merlin was a time-traveler. Who knows what he got up to bouncing around?
Also, the Gatekeeper was active in the 8th century. Presumably he used Nevernever time-dilation to still be alive today.
So Merlin could have been a young wizard like Harry around 500 AD (the time usually ascribed to Arthur by those who think he was a historical figure) and still be active around 1500.
I don't think Merlin actually founded the Council before the Church, I think he "re-founded" it after the fall of the Roman Empire and wrote the Laws of Magic, turning an earlier classical organization of wizards into the modern White Council. Arthur and Merlin are associated with the time immediately after the fall of the (Western) Roman Empire.